The party with the best policies for property is the Conservatives, according to 70% of EG readers. Yet the stark fact is that almost any outcome from Thursday’s general election will be bad for this industry.
Labour’s plan for intervention in the residential market is the headline concern, according to the REview, our new monthly poll. The fact that David Cameron is less popular than his party doesn’t help the Conservative cause either. But it is his promise of a referendum on Europe that is driving similar levels of anxiety.
This tension rippled through several events this week – dominating discussion at our London Question Time on Wednesday (look out for coverage of what was a fascinating debate next week) and at Thursday’s Movers & Shakers breakfast at The Dorchester.
At these, and at the latest gathering of our Real Estate Leaders Group too, the chief executives of many of the biggest REITs, the heads of some of the most powerful institutions, as well as bankers, private investors and agents, all wrung their hands and shook their heads.
The consensus is that the mere threat of rent controls and mansion taxes is enough to put off investors. But no less damaging would be two years of uncertainty ahead of an EU referendum. Add to that a growing fear that further property taxation is inevitable and property’s political climate looks dicey indeed.
To this you may add the single-issue political parties and the protestors – some with a case, some less so – that are gaining traction and frustrating developers (p52).
And we should expect politics to seep into other areas of real estate. The incoming defence secretary will have to make a decision about a potential £1bn sale of Hyde Park Barracks in prime Knightsbridge (p29). Will it be possible for the government to trigger further prime residential development on MoD land in a climate where the defence budget is under unprecedented scrutiny? It’s controversy squared.
So it is an election whose ultimate outcome may be uncertain but from which there will certainly be negative consequences for the property business.
But, to conflate the off-platform views of a couple of chief execs this week, given that the financial crisis has worsened living standards for so many through no fault of their own, it’s not all about real estate’s financial stability. Social stability matters too.
• This year’s Estates Gazette Awards are open for entries. Once again we’re looking to celebrate the best investors, developers and advisers and this year we are introducing two new categories to reflect the changing shape of the industry: Global Real Estate Adviser and Global Real Estate Company of the Year.
After a record number of entries last year – and a market that has only got stronger since – competition will be intense in each and every category. We will let you know the names of our judges in the coming weeks, but you can expect the most respected names in the real estate business and beyond to be among them. And to ensure you are in with a chance of securing the recognition you no doubt deserve, turn to page 80 for details of how to enter.
• Sir David Michels, the former UK chief executive of Hilton Group, has bought and sold a few hotels in his time. But his new fund means for the first time he is doing it for himself. And his approach – or at least his language – is refreshingly honest.
His only goal is to make money. Not to build a brand, not to fall into line in with an existing brand, and not to slavishly follow a predetermined strategy that dictates size, stars or location.
“No one has ever approached hotel buying like this before, which doesn’t mean it’s going to work,” he says. “It just means it’s original. Maybe no one has done it before because it’s just not a good idea. I am quite open to reality,” he says.
Such candidness is refreshing. I suspect it will work.
